How long do I have before I register with HMRC once I start trading?
You must notify HMRC within 3 months to avoid a £100 penalty. If you’re approaching this deadline then contact us and we will help you get the form in on time.
What are the deadlines for Corporation Tax return filing?
The deadline for filing your corporation tax return is within 12 months of the end of your company’s corporation tax accounting period. Yearly filing would include the submission of your company tax return form and other supporting documentation. If you fail to file your return on time your company will be charged an automatic penalty, even if it does not owe any corporation tax.
What is a Companies House annual return?
An annual return is a document that is filed once a year at Companies House. It provides non-financial information about the company and ensures the public record is kept up to date. Companies House require a fee of £50 to file this document electronically. We do not charge a fee should you require assistance for filling.
Can I do other work through my company?
Yes. Most companies Memorandums and Articles allow a wide range of business activities. You can run more than one activity through a company. As long as it is legal! We can help you understand your companies Memorandums and Articles and adopt new ones where required to suit your business needs.
What is IR35?
IR35 is HMRC tax legislation that was introduced to identify contractors who are receiving the tax benefits of working through a Limited company when they are really a disguised employee of the clients. Be aware of this! Depending upon the nature of your business, it may affect you and potentially undermine the benefits of trading through a limited company.
What trading vehicle is the best for me
Ignoring, for now, charities and other specialist situations, there have traditionally been three principal methods of conducting business: Self employed or sole proprietorship, Partnership and Limited Company. There is a further trading vehicle, the Limited Liability Partnership.
Which vehicle will be best for you will depend upon your personal circumstances as well as the nature of the business sector that you are joining; many factors need to be considered, and we are here to guide you.
Does my company need an audit?
Generally your company will only be required to have a statutory audit if it is not ‘small’ company as defined by size criteria set down in The Companies Act (and amended from time to time by Statutory Instrument). There are exceptions to this, for example if you are a company registered with the FSA. You will also be required to have an audit if more than 10% of your members require you to do so. You may also wish to have an audit for other reasons, for example if you are a members body that has to submit accounts to many members or if you are an organisation of public interest.
Can the company pay my personal expenses
This is not advisable. Personal expenses paid by the company can be allocated as a repayment if the company owes you money, or can be treated as an allowable company expense but you will have to accept a taxable personal benefit, otherwise it’s a loan and accumulates a tax liability.
Do I need receipts for expenses?
Absolutely. You must be able to provide proof of all the company’s business expense claims for a period of 7 years after the claim has been made and 6 years after the company has been wound up. This is in case HMRC decide to audit or investigate
Can I have a company car? And if so what are the tax implications?
The company may provide you with a company car and fuel for personal use. However, this will create a taxable benefit in kind (based on the actual list price of the vehicle and not the purchase price applied to a detailed formula). Be aware of the tax implications – both for you and the company. We can help you decide if it is better for the company to provide a car, or for you to use a private car and reclaim mileage.
What do I do if I want to employ someone?
You must register immediately with HMRC as an employer. You will need to deduct PAYE and National Insurance from your employee’s salary at prescribed rates. If you do not do so, or make incorrect submissions to HMRC then you can be liable to heavy penalties and interest on tax and NIC that you do not pay over. You will also need to disclose and pay NIC on employee benefits that you provide to your employee
How do I pay myself?
If you are a director/shareholder of a limited company then you can pay yourself by means of a salary or by declaring a dividend which is paid to shareholders out of its profits. Advice needs to be taken about the best way to do this.
After due consideration of your particular circumstances, we can advise you on the most tax efficient means of extracting profits from the company.
If, on the other hand you are a sole proprietor or partner, the wages and salaries you pay to your employees are deducted in arriving at the profits on which you are assessed to income tax. It is important to understand that what- ever you may draw out of the business on a weekly/monthly basis to meet personal living costs is NOT a wage/salary in these circumstances.
Can the company make investments?
Yes, provided they are within the company’s allowed investments and objects.
Can the company pay into my personal pension?
Definitely. The company can make payments into pension plans which are a tax deductible expense for the company.
Can I take a loan from the company?
Yes you can, but you should look at it as a short term measure. It’s best to speak us prior to moving funds to ensure you are aware of all the implications.
How do I close my company?
We can help you close the company, calculating any outstanding liabilities or refund and meeting the legal requirements, culminating in your company being struck off the register at Companies House.
What is the difference between “Tax avoidance” and “Tax evasion”?
Tax avoidance is where you use legitimate and legal means to use the tax system to your best advantage. Tax evasion is where you go outside the law to gain an advantage. In general terms if you are doing something that you do not wish to be disclosed to the tax authorities or that you hope they will not find out then you are treading on thin ice and should think carefully about what you are doing. If you have any doubt then you should urgently seek advice.
What are the deadlines for Personal Tax /Self-assessment return filing?
Under self-assessment, a paper return must reach HMRC by 31st October and an online return by 31st January. If you fail to file the return, you automatically receive a £100 fine - even if you don’t owe any tax or have paid the tax you owe. If, for whatever reason, you miss the deadline, the longer you delay the more you pay.
We examine every client’s individual circumstances closely and suggest planning well in advance so that you pay only as much as you have to and don’t incur a fine.
When do I pay personal tax?
Some income is taxed at source, for instance salary through the PAYE scheme, other income such as dividends are received net of basic rate tax. Your personal tax return compiles your total income and allowances for a tax year and determines your final tax liability or even a tax repayment. A liability is payable in up to 3 instalments to 31 January before the tax year end (5 April), the 31 July after the year end and a final balance on the following 31 January. This is sometimes difficult to follow but we can explain this fully.
When do I need to send my accounting information to you?
It is good practice to send records of your business transactions on time and you should send everything we need once you have come to the end of your accounting period. It is important that we receive everything in good time, to meet your return deadlines. Always remember that your records should be complete and accurate for us to provide correct services and advice to you
What information do I need to send you?
When we send you a letter requesting for your accounting records, we normally include a checklist to assist you, although we will advise you of this during our initial meeting.
I have money or assets overseas. What are my responsibilities here?
If you are resident and domiciled in the UK then this is easy. You must account to HMRC for everything. If you are not domiciled here then things get a little more complicated. The definitions of residence and domicile are long and complex and have to some extent been decided by case law. If you are not sure then you will need to take advice.
How Much Tax Will I Pay?
This depends on your circumstances, we will of course explain in precise detail how we have arrived at your liability, according to legislation and offer you any assistance possible, relating to the payment of same by contacting HMRC, with a payment plan, if this should be necessary
How much do I pay myself?
Once you’ve agreed a salary with us, we’ll provide you with a wages’ summary. This provides guidance on your net salary that you can pay yourself on a monthly basis. You also have the option of taking some dividends, which are paid from remaining company profit
How often can I make a dividend payment?
Interim dividends can be paid throughout the financial year; final dividends are paid at the end of the year. Dividends can ONLY be paid if the company has a ‘distributable profit’. Payment of dividends without profit is a breach of the Companies Act 2006. Director’s face repayment of all illegal dividends and possible prosecution. Once again, it comes down to planning, and monitoring actual against planned results in order that the payment of technically illegal dividends is avoided.
How do I pay shareholders company dividends?
The first thing you need to know is dividends are paid to shareholders from the company’s retained profit after tax, so you need to make sure the payment reflects the number and class of shares held.
Can I claim travel expenses?
Yes. Travel expenses can be claimed however there are rules to be considered as your workplace must be a temporary one. A temporary workplace is one that will last less than 24 months. If you become aware that your assignment will exceed 24 months, main site travel expenses should not be claimed from this point onwards. Copies of all receipts should be retained and in the case of mileage, an accurate log should be kept.
How do I claim mileage?
HMRC guideline allowance is 45p per mile for the first 10,000 miles and 25p per mile thereafter (tax year 2025/26) and other rates apply for motorcycles and bicycles. Main site mileage should only be claimed if the assignment is deemed to be temporary (i.e. you expect the assignment to last for less than 24 months). As soon as you become aware the assignment will exceed 24 months, any main site travel expenses should not be claimed as this will be categorized as a permanent work place.
Can I claim for my lunch?
Yes. Reasonable subsistence expenses for working away from home or your normal place of work can be claimed. Keep copies of all receipts and make sure the sum you claim is the exact amount incurred, not round sums
Can I claim for accommodation if I am working away from home?
Yes. If you are away on business overnight, you can claim the cost of your accommodation. You can also claim expenses for rented accommodation if you need it for business purposes as long as it is not your main personal private residence.
Can my company provide me with a mobile phone?
Yes. Further advice on claiming for a mobile phone can be obtained from us, including what you can claim for when using your home as an office.
Can the company pay for childcare costs?
Yes. Every employee can claim £55 per week from the company to help with childcare costs, as long as they are paying a registered child-minder
Do I need receipts for expenses?
Absolutely. You must be able to provide proof of all the company’s business expense claims for a period of 7 years after the claim has been made and 6 years after the company has been wound up. This is in case HMRC decide to audit or investigate.